Travelers sets DECS offering at $850 million

New York, March 4 - Travelers Property Casualty Corp. fixed the size of its upcoming offering of Upper DECS at $850 million.

The convertibles will be sold at the same time as the company makes its initial public offering of 210 million shares of class A common stock. After the IPO, Travelers' current parent, Citigroup, will own all its class B shares and an unspecified percentage of the class A shares, according to a filing with the Securities and Exchange Commission. By the end of 2002, Citigroup will distribute the remainder of its ownership stake to Travelers shareholders in a tax-free distribution.

The DECS portion of the offering has a greenshoe of $42.5 million while the stock offering has a 21 million share greenshoe.

In total, the Hartford, Conn. property and casualty insurer registered $5.2815 billion of securities with the Securities and Exchange Commission, an amount that includes the stock, the DECS, both greenshoes and assumes the stock is sold at the upper end of the price range of $16 to $19 specified in the registration statement. Travelers has applied to have its class A stock listed on the New York Stock Exchange under the symbol "TAP.A."

Citigroup's Salomon Smith Barney was named as lead manager for both offerings.

The DECS will mandatorily convert to stock in 2005 while the underlying notes will mature in 2007. Interest will be paid quarterly. Travelers also intends to have the DECS listed on the New York Stock Exchange.

Proceeds from the stock and DECS will be used to repay indebtedness owed to Citigroup.

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